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Del. panel recommends casino changes

DOVER, Del. (AP) — A panel examining how to keep Delaware's casinos competitive voted Tuesday to recommend changes that could cost the state more than $20 million a year.

Members of a study commission, established by Delaware lawmakers in the face of growing competition from casinos in Maryland and Pennsylvania, agreed that the state should split 75 percent of the costs for slot machine vendors and fees with Delaware's three casinos, rather than having the casinos continue to pay the full amount.

The change, which would take effect July 1, would cost the state $9.9 million next fiscal year.

The panel also approved eliminating the annual $3 million table games fee paid by the casinos effective July 1, 2015, and to reduce the state's share of table game revenue from 29.4 percent to 15 percent, at an estimated annual cost of $7.2 million.

The commission also proposed an update of a 2004 study of Delaware's equine industry to determine the current economic impact of the horse racing industry. The study is expected to cost less than $100,000.

Another recommendation approved Tuesday was to use $3 million in unspent funds from an $8 million financial bailout extended to the casinos last year to pay for economic development initiatives, preferably related to the gambling industry.

The recommendations, which are supported by Democratic Gov. Jack Markell, will be submitted to the General Assembly for lawmakers to consider.

"It doesn't necessarily mean this will be the final outcome.... I think it's a good starting point," said House Majority Leader Valerie Longhurst, D-Bear, who voted for the recommendations.

Panel members voted 7-to-2 to approve the recommendations, which were proposed by Sen. Brian Bushweller, D-Dover, who district includes the Dover Downs casino.

State Rep. Charles Potter, D-Wilmington, and state economic development secretary Alan Levin voted against the recommendations.

"I am a little bit concerned about the state's current economic crisis, and looking at a $20.1 million cut to the state makes me a little bit nervous," Levin said.

Levin supported the proposed changes involving table game revenues and fees but did not agree that the state should share in slot machine costs.

"In the end, I think this is too rich for us," he said.

Levin proposed changes that would have cost the state $14.9 million a year, combining the table game cuts with $2.5 million in incentives for casinos for marketing and renovations, and a reduction in the online gaming tax to a flat 25 percent for all games.

Panel members refused to go along with Levin's suggestions, however. They also shot down Potter's request for an updated study on whether allowing more casinos in Delaware would provide an economic benefit to the state. Potter has been pushing for a casino in Wilmington.

"I don't think there's a stomach for this in the state for additional venues... I think it comes in dead on arrival, to be honest with you," Levin told Potter.